TMI Blog1939 (2) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... re: (i) Whether the assessee can be said to be a mutual society and exempted from tax under the principle laid down by the House of Lords in (1889) 2 Tax Cas 460 New York Life Assurance Co. Styles (1889) 14 A C 381=2 Tax Cas 460=59 L J Q B 291 (ii)the finding of fact being that the assesses is doing a dividing society business, has the Income Tax Officer correctly held that R. 81 of the Income Tax Rules applies ? 2. The opinion of the learned Commissioner given, as S. 66 (2) requires, on these two questions of law is, on the first question that the assessee is not a mutual society within (1889) 2 Tax Cas 460 New York Life Assurance Co. Styles,(1889) 14 A C 381=2 Tax Cas 460=59 L J Q B 291 and on the second question, that the finding o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin (1389) 2 Tax Cas460 New York Life Assurance Co. Styles,(1889) 14 A C 381=2 Tax Cas 460=59 L J Q B 291 has himself considered as a question of law the kind of business done by the society. Therefore, we think, we should consider and decide the question whether the business of the assessee is a dividing society business within the meaning of R. 31 of the Income Tax Rules. We do not think we are precluded from considering and deciding this question because the learned Commissioner has not specifically referred it to us because it is in his opinion a question of fact. It is always desirable that the Commissioner should state correctly the questions of law raised by the stated case, but we do not think that we are precluded from deciding que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad as Dividing Insurance Society. Rr. 25 to 30 clearly relate to Life Assurance Companies incorporated in British India and other classes of insurance business (fire, marine, motorcar, burglary and so on) of companies incorporated in British India whose profits are periodically ascertained by actuarial valuation. Rule 31 reads thus : The income, profits and gains of companies carrying on dividing society or assessment business shall be taken at 15 per cent, of the premium income in the previous year, and in the case of non-resident companies at 15 per cent, of the Indian premium income in the previous year. Rule 32 states : Notwithstanding anything contained in Rr. 25 to 31 the total income however of an insurance company carryin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce society. R. 2 (c) made under 8. 39 of Act 6 of 1912, as set out by the learned Commissioner, refers obviously to a dividing insurance society business. This definition is as follows: Dividing insurance business means any form of insurance business under which the policy money payable on the happening of the contingency insured against is not fixed but depends either partly or wholly on the results of the division of any portion of the premium income or funds among the policies which have become due for payment in proportion to the premiums received under each class in any specified period. 6. Reference to the rules of the assessee company shows that it is precisely on these lines this company works. R. 62, for instance, provides f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, (1889) 14 A C 381 New York Life Assurance Co. Styles, (1889) 14 A C 381=2 Tax Cas 460=59 L J Q B 291, that this assessee company most strongly relies, but in Styles' case New York Life Assurance Co. Styles, (1889) 14 A C 381=2 Tax Cas 460=59 L J Q B 291 the company had no shares of shareholders entitled to dividends as distinct from the policy-holders and their right to distribution of mutual contributions. Broadly speaking, the members merely took out of the fund what they put in. There were no two separate and distinct parties contracting one with the other. But this is not the case here. The assessee company and those whose money they collect and in part retain are quite separate and distinct parties. The assessee company is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st's case Last v. London Assurance Corporation, (1885) 10 A C 138=55 LJQB 92=53 L T 634=34 W R 283=50 J P 116=2 Tax Cas 100 was that in Styles' case New York Life Assurance Co. Styles, (1889) 14 A C 381=2 Tax Cas 460=59 L J Q B 291 it was a case of mutual assurance pure and simple, and that there was no company, as in the present case as there was in Last's case Last v. London Assurance Corporation, (1885) 10 A C 138=55 LJQB 92=53 L T 634=34 W R 283=50 J P 116=2 Tax Cas 100. 8. The words of Rowlatt J. in (1926) 10 Tax Cas 442 Liverpool Corn Trade Association,. Ltd. v. Monks, (1926) 2KB 110=95 L J KB 519= 134 L T 756=10 Tax Cas 442=42 TLR 393 at p. 453 are also applicable: But in a case of this kind, where there is a share ..... X X X X Extracts X X X X X X X X Extracts X X X X
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